Mother’s Day and Other Stuff

Happy Mother’s Day to those of you who are mothers or honor your mothers on this important day.  My two kids—well they are officially adults at 18/2--I gave me flowers, a gift certificate for some much needed personal beautification and did an EPA cleanup.  I was very appreciative.

Since mid-January, I’ve been working full-time plus.  In fact, I cannot remember a busier time in my life than the last 30 days.  Today is the first weekend I’ve had off since March 26.  The days were beginning to run together. I don’t care for that. 

My family has been ‘used’ to having me around.  Though busy 10 hours a day with my stock research and ‘stuff’, it is very different from operating in deadline and outcome oriented days.  I do have to grocery shop.  I’m out of everything. Frankly, doing some mundane chores would be welcome.

I did a dog run yesterday.  I’m sore from lifting crates, pups and dogs.  I had a lovely hound mix riding shotgun.  A very sweet dog who was content to sleep but intent in contact.  So many of these dogs crave the human touch.    My ‘Fit by Fifty’ jag as been compromised by all of this work.  It’s an excuse more than a reason.

My portfolio has done well by my not ‘monitoring’ tick by tick.  I’ve been listening to Gary K more regularly, only because I’m at a client, and I can listen while running payroll and doing other ‘must do’s’ that don’t include concentration.  Concentrated work requires quiet for me:  no music, no TV, no disturbances.  The good news is that I can concentrate for very long periods of time.  That is also the bad news—it’s not good to sit too long.  I’ve had long strings of that this month (15 hour days), and I’m glad to be over that for a small bit of time.

What little time I’m spending on the market, I’m spending by looking at charts.  Here’s a weekly chart of just one of the many charts that are starting to move.

This chart has the characteristics of what you would want to look for….consolidation along a base coupled with volume on an outbreak.  It’s not rocket science, but it sure does seem to be made that way. 

When I started writing this blog almost 3 years ago, I named it The Perplexed Investor, because I was truly perplexed.  I’m much less perplexed now.  But only for the long hours of study and a steady diet of tuition payments.  I feel like I’ve learned life-long investor skills.  Would that I had learned them earlier!

I do know this…one really has to learn this stuff for themselves.  Otherwise, the charlatans and the professionals—oftentimes one of the same—cannot be distinguished.  But, ultimately, one has to depend on themselves—and that means studying.  I still believe the singular best book on the market is Stan Weinstein’s book.  If you master the disciplines in that book. that is all you need to know.  That way, you can find charts like this on your own…and you must know how to read a chart; otherwise, you might as well cross the highway blindfolded.  You don’t take such risks with your person; why should you do it with your money?

Bear Market Comparison

http://www.nytimes.com/interactive/2008/10/11/business/20081011_BEAR_MARKETS.html

 

You might remember that the NY Times did a comparison of this bear market v. other bear markets.  Click above to be transported.  I see that they’ve updated to 2009.  That’s recent, as I looked not too long ago and did not see an update.  It’s worth a look. 

Jeff Saut – 9 1/2 Weeks…..Stan Weinstein 30 weeks

Jeff Saut is one of those voices that is prudent to listen to.  He doesn’t make wild declarations, but insightful comments and analysis that underscores his very intuitive feel for the markets.  Plus, you gotta love someone that crafts his/her opinion in a way to inform rather than perform—as in being a circus barker.  Do take a look at his newest comment here called 9 1/2 weeks.

I’ve not done a dog run in over a month. I’ll do one on Saturday—Richmond to Springfield.  I’ll likely have to work the other day.  I should stay home and get some house stuff done. I’ve been busy preparing a forecasting model for my client.  It is a work of art, and like Neo in the Matrix I feel like I’ve become one with my model. 

Models look simple in the end, but the amount of work that goes into them is abundant.  And concentrated.  Over the last couple of weekends, I’ve worked 12-14 hour days crafting the model, in addition to work over the week.  I still have one more to do on this model—alot more, but for now, I’ve got a really robust product.

My other client has been terrific and understanding.  His basic needs are getting met, but …… The good news is that I’ve hired a terrific person.  Who starts full time this Monday.  That will take me out of the day to day and help me focus on the longer term, higher level stuff.  Nevertheless, juggling the priorities has been on going.

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I keep reading material in the bathroom.  The female system is not so efficacious as the male system if my experience in my household is fair to project.  So reading material helps to pass the time.  I keep Stan Weinstein’s book in my downstairs bathroom which is right off of my office.  It is a well-flagged book, and I like to look at the flags and refresh my knowledge.  If you’ve not read the book, you will find it informative. 

I’ve finished my Justin Mamis series, and I’m beginning again with The Nature of Risk. Justin Mamis founded The Professional Tape Reader  and Weinstein later took it over.  If you were to read both of them, you can see how close their philosophy’s are.  I think that Weinstein’s book is more to the point.  But, as you can tell from my own writing style, a meandering book is one in which I’m comfortable.  The Mamis books go to some pains to develop the psychological context.  The lists in Weintein’s books are terrifically helpful.  They are all flagged. 

The 30 week indicator is integral to both Mamis/Weinstein.  The weight of the evidence is central to the theme of determining the trend with the 30 week indicator a bellweather.  After my respite, I started to look at charts from my indices DJ Sectors that I keep on Stock Charts.  I found that most (not all) have been trading over the last month above their 30 week moving average.

The hardest thing about approaching the market (I’m generalizing MY experience) is separating one’s tendency to overlay his/her bias on what they see.  Having reliable indicators and weighing objectively the weight of the evidence coupled with buying in such a way to manage sensibly one’s risk in the market (and risk is omnipresent) are central to success.

Many of the currencies are at key technical levels. 

 

If the dollar is to break, commodities go up, then EWA might be attractive.  I’m looking at that currently.

I’m out of time.  It might be worth your looking at a few of your favorite charts….

A Break from Tyranny

While the post title may sound like the opening of an important treatise on freedom, it was merely inspired by a colossal software problem that I experienced recently.

I’ve been writing my infrequent and sparse blog comments over the last couple of weeks using Windows Live Writer.  It is a terrific program for interfacing with one’s blog and makes it 100 times easier, faster and more enjoyable to post. 

Unfortunately, I must have downloaded some components of this program that planned to take over my entire life.  It managed to disable my MS Office Professional (2000) suite of products.  I managed to disable and uninstall a number of the components to bet my programs somewhat functional.  Word, though, and Powerpoint are toast.  I do have my Outlook back up and Excel.

Though I’ve tried to repair the file, and reinstall, Word still remains wordless.  But I have many years worth of documents that I need.  And the most important thing that I need is my billing template.  What did I do?

I remembered that there is a suite of products called OpenOffice.org.  They are compatible with Microsoft.  I downloaded the suite and was able to open my billing template.  I wasn’t in the mood to update my Office Suite product, and I’m still made, that the file doesn’t work.  Something about Windows LIVE! kills.  At least the carcass is not stinking anymore.

I do remember taking a test drive of the spreadsheet.  There were enough differences that I found it frustrating.  But word processing is easy.  But OpenOffice.org offers a nice alternative for folks that find the licensing for the MS suite expensive and cumbersome.  It is maddening, though, to have a fully licensed product and NOT being able to use it.

If you are looking for a robust office suite platform that is compatible with the other suite spawned from the loins of the devil AND that if free, you should take a look.

Having said all that, I would like to have my Word and Powerpoint functioning fully.  At least I can write to my blog easily, even though the foundation of how I make my living has been crumpled by this software error.

My Son’s Senior Prom

 

My son and his lovely date.  I skipped my senior prom, but I did go to two other prom’s with guys who were seniors.  I was young and cute once too!

Doug Noland At Financial Sense

It would be worth your time to listen to this broadcast with Doug Noland.  You can find it here: http://www.financialsense.com/fsn/main.html

I particularly liked how he outlined the potential mispricing in risk in Treasury assets.  But it is a lucid and interesting broadcast, that I think that you would enjoy.

 

 

 

Doug Noland
Market Strategist
David Tice & Assciates

Topic: The Credit Bubble Crisis

Ginger

My beloved Ginger, my neighbor’s beautiful Golden Retriever is dead. Ginger’s first love was Tim, her second love, the water, and I think that I was her third love. Tim has a wonderful pond in which Ginger spent untold hours swimming. I would go over there some afternoon with buoys to throw for both her and Macy. It was great fun for all of us.

She died last Friday evening. I did not know until yesterday. She was fetching her last ball and came upon the shore and walked up the incline only to collapse. It was quick and painless.

Tim buried her on the hill overlooking the pond. I will miss her very much. Lacy, Tim’s other dog, was very attached to Ginger. When Lacy was little, Ginger would swim and Lacy would climb upon her back. I would take the kayak out and have Ginger, Macy and Lacy swimming around. I turned it over once and wrote about it here. Ginger swam with me the entire way.

When Tim brought Ginger home, I was working in Northern Va during the week. So each week, I’d come home and find this little puppy growing quite fast. She grew so fast she blew her knees out. And this little puppy wanted so much to be friends with Lucy and Greta, neither of whom would have anything to do with her.

But then Lacy came, then Macy came. And we had this younger generation of dogs to take the work and worry of puppies off of the older dogs. With Ginger passing, a generation has passed. These dogs lived the best lives. It is not enough to love your dog, but to give your dog a place to BE a dog.

Ginger could BE. And she died doing what she loved to do.

I’m in guerilla mode at work. I had my book club yesterday, which I had to pass on. I started work at 7 a.m. yesterday and closed up shop at 8 p.m. It’s 7:03 a.m. now. I’ve another horrific day ahead. But I did want to acknowledge the passing of my good friend who I called both Gingie and Gingus Khan. She sure did conquer my heart.

Computer Mayhem

After spending  productive day getting necessary work completed, I found that this a.m. that my computer is having some issues.  It wants to reinstall Microsoft.  I have no use of OUtlook or other Windows programs.  I’m currently trying to install from a Maxtor backup my program files.  I’m not comforted that I’m getting some messages from Maxtor that certain of the files cannot be restored.

I’m also getting on exit update software for Windows, that seemingly does not want to update.  Strange—but I’m always suspicious about the amount of invasiveness that we have on product registrations and updates and the like. Seems to me that they are getting too much information.  That statement is coming from someone who is not terribly conspiratorial in her thinking.

We rely on this stuff until we can’t, and then our lives go into a bit of a tailspin.  This feels like a virus attack, though I’ve plenty of inoculation.  Not being able to open Outlook, or use any my Work/Excel files is not a happy circumstance.

I do so like this Windows Live for the Blogger interface.  It makes inserting pictures and stuff so much more easier.

I now have to redo my daughter’s taxes as my daughter and my husband share the same first initial and that is how TurboTax saves your file.  Yes, the dummy warning came up, but I thought it was because I had already saved the current return previously, so it did not seem like much of a warning.

At least her taxes are simple.  I was able to download all of my stuff from Fidelity and Ameritrade.  So, I’ll slog hers out as I wait an pray for a restoration.  I go to by stepmom’s who if fixing a wonderful Easter lunch.  Then it will be off to a client. 

Happy Spring

This time of year has a convergence of religious observances.  Spring’s transition brings with it much violent weather.  Transitions in the weather and the market are similar.  I write as I listen to FSO.  Robert McHugh his talking technicals. 

New bull market?  Bear market bounce?  I don’t know.  He thinks, like many, that it is a bear market bounce, and will be followed by a cataclysmic fall later.  And there are the ‘many’ who believe that we are in a new bull market. 

I think that the market has never gone through a real psychological bottom that would be marked by lackluster response to good news, but also lackluster response to bad news as most are sold out.  Maybe I’ve missed something, but I don’t think so. 

So far I’m doing okay without having lots of money committed to the market.  I’m not worried about missing anything, but rather making some base hits to pay some dividends.  My accounts continue to be at all time highs. Because I sidestepped the carnage, I do not feel the need catch up.  Rather, I feel the need to continue to be prudent.  Prudence meaning opportunistic in finding lower risk entry points with some decent probabilities.

There are lots of interesting chart set ups.  I’m interested in seeing what OIH will be doing.  Here’s a Renko chart which I think shows nicely the current chop in the chart.

I have some ERX which I’ve held since I purchased it at $34.  Yes it went down muchisimo.  But I held it.  It was 100 shares.  I don’t see OIH as being a low risk purchase currently, as the chart on many fronts looks overbought.  But the range is worth watching, and there may be a buy point soon if (1) it falls and holds at the bottom of the range or (2) it breaks out of the current resistance with some volume.

Apparently my AZC stock that I bought at .53 received an upgrade.  I found this stock by trolling through charts.  The volume levels were outrageous in December. 

I’m want to unload the last of my position.  I didn’t cultivate my holding as well as I should have, but I’m very happy with this low risk high reward position.  The trick is to not blow it on a less well-considered position.

I’m reading my third and final Justin Mamis book called How to Buy Stocks.  These books have been a tremendous source of information.  I’ve not had much time to read or even write to my blog.  I sure have missed it.  I’ve client work to do most of the weekend.  It filled last weekend as well.  I also need to do some tax returns.  Both of my industrious kids made money last year, and I’ll need to account to the government for it! 

No dog run this weekend, either.  That’s the second week that I’ve missed in a row.  But I’ve offered money to rent a van or pay for gas for other volunteers.  At least I can log on and work from home.  I can take laundry breaks!

I’m posting this blog through Windows LIve…..it is an easier interface than Blogger’s or even Scribefire.  I’m going to hit the publish, and hope that it does not blow up!

A Long Week

My work schedule has become brutal. I've been MIA in aspects of my life to include my blog.

On April 1, my son turned 18. I'm officially the mom of two adult children. We celebrated by going to Outback. I had two gift certificates. The four of us managed to eat enough to exactly use the the $75 gift card. I gave the waiter a $20 tip. The cards didn't cost anything.

I met my family there. I ordered a margarita. It was not any good. I needed a good drink more than I needed a good meal!

My schedule has taken me away from the daily market moves and news and the like. I still watch charts, but for a fractional amount of time. I'm pulling this chart up because it contains lines that I have not updated in a very long time. I think that being able to spot a topping pattern is one of the singular best things that one can learn in the market. This happens to be a rather beautiful one in its symmetry.

You know my fondness for Chinese stocks. Here's one that I have. It has been a attractive performer. They are a biodiesel producer.

AZC has been a phenomenal performer for me. It is at a point where it might fail. Not trusting the advance, I sold into successive rallies. I'm down to 1/3 position, and it is up 2.5x my purchase price. It house money that I do not want to burn down in a conflagration or renewed fears on the economy.

Sector ETF's: While the sector levered ETF's are an easy way to invest, I'm of the mind that finding decent chart patterns (if one is so inclined, as I am), is a better way to capture some quick moves. I'm still in UYM and UYG, but I did far better with my BAC flip than had I gone into UYM more deeply. Since I'm in chart mode, I'll present these.



That volume is pretty phenomenal is it not? I have a small position. You can see that AZC has powered beyond the ETF. AZC will have about 10% of the US copper reserves once its Rosemont facility is completed. They recently did a private placement with a mining investor @ 1.50 for some shares that included one share of common and one option to buy a share at $2.30. You can read about them here.

My security themed play is NSSC. This chart is not in a great mode in terms of volume. But, I bought some anyway in a couple of tranches.

Do you see that very long line in March? That should be a reminder to you that you do not place market orders for thinly traded stocks.


I'm still 93 %and 73% cash in my tow main accounts. Both accounts are at all time highs. I'm being methodical and selective--that I'm working 12 hours a day helps ensure that I don't jump in and do something stupid.

I think that the greatest gift from sidestepping a bear market is that psychologically, one doesn't feel the need to 'catch up'. And to provide one of my body blows, I present WH. The purple line is my buy point. I still believe that energy is important to the Chinese, and that this provider of tubular steel products will benefit from that drive. That they have cascaded downward along with the balance of the energy services complex is not a surprise given the belt tightening.


No dogs today......just work.

My red buds are blooming. I'm now in the second year of my forest pansie red bud blooming that is the grave marker for Lucy. One of my original blog readers MarkM suggested this red bud. It has done well in its location. My more mature redbud has a radius of pet corpses below it: Greta, Mylo and Chloe. I hope to not be doing any more digging for a while. I may find myself under one of those trees to in the distant future!

Sunday P.M.

I'm back from a nice visit with an old friend who lives in Maryland. I combined a dog run from Richmond to Springfield. My friend lives in Rockville, so it was just a short drive from there.

We had a large group of dogs. The volunteer who coordinates this effort every single week shared the following video. It is of a dog, now grown, who was adopted out as a pup from the Kinston SPCA--the originating facility for my dog run. It's a reminder of how a loving home can offer an animal the opportunity to be a valued member.

Click here.

My friend, Carol, and I had a very long walk and managed to meet some really cool dogs. One woman had a large male American Bulldog on one hand and a diminutive and extraordinarily cute female French Bulldog. She was barking almost ferociously, but she was a total love bug. Here barking was 'talking'. The AB was a a very affectionate and extraordinarily handsome (and big) fellow who was eager to meet new friends.

It was nice to get away, but I'm very slammed. I've another busy week. This weekend was a nice recipe respite (gosh, it is terrible to get old!).

A reader asks about WH


I'm still holding. This chart is broken....and if it cannot hold above the green line, then another cliff dive is possible.

From Good to Great ---

http://www.stockmarketmentor.com/public/1737.cfm

Dan Fitzpatrick provides a number of free videos through his Stock Market Mentor service. Stock Market Mentor is a paid service, but like most folks, Dan provides entrees into the value of his service through these free videos. I do not subscribe to his paid service, but I eagerly await and enthusiastically watch his videos. I suggest that you do as well, and you can do so with your own adverbs.

What I like so much about DF's series, is that they are straightforward and to the point. And if you want to understand how to manage risk reward on a chart, then his videos will help you. Finding lower risk entry points that are closer to points that will tell you with anvil-on-the-head clarity that you are wrong, provides smaller price space and reduces your losses. If you buy when the space between right and wrong are wide, you'll have to pay up for being wrong.

It's such a simple concept, but very hard to do in practice if patience is not in your investor/trader psychological arsenal. Lack of patience in entering, leaving or staying in a trade can cost you money (to include selling before significant move--I do that frequently). The antidote for impatience is clarity and discipline. Find low risk entry points and clarify what will happen in the chart to prove you wrong. Walk away when the space is wide between being right and wrong, but keep a good watch list.

Your watch list is your reminder of things to look for when the the space between right and wrong narrows. I'm better about my lists, but I'm not great. I want to go from good to great.

BAC

Here is a 7 year chart on BAC. I found the volume astounding. Most of the volume in this stock is at the current price bar. I don't own this anymore. I took my money and ran. I left money on the table--but that money only stayed on the table for one day.

I also sold one half of my AZC. It had doubled. I exercised discipline and sold. Of course, losing 'house money' is painful too.

I have a date with this little guy today, among others:

Spring Forward, Fall Back

The simple saying to help the old folks (which now includes me that left her memory and other valuables in some other year) remember which way to set the clocks. It is also appropriate for market rallies--of any sort. It's just that in bear markets, the 'fall back' literally involves one falling out of their chair and cracking his/her head on the concrete floor.

Seems like the Fed's comments cause a barnstorming event. With the kindling being quite dry from a relentlessly downward march in equity prices, only a spark was needed to cause a conflagration of buying. I don't feel compelled to jump all in, and I've had a few seeded positions that are rewarding. I elected to sell my BAC as I had UYG exposure. I took my 62% gain, but had I hung on (famous last words), I would have enjoyed 50% more gain. But, I elected to invoke the discipline in this screwy market of taking substantial gains (particularly over a short period) when I have them.

Enough about me already....let's look at the industrial metals chart

Has it bottomed? I do not know, but we are seeing a recovery in metal prices. This is the chart that I watched and posted infrequently about when there was a mad rush to all of the metals. Those stocks were topping while the industrial metal prices were surreptitiously falling.

Financial stocks should be the first guys out of the block in another bullish phase with commodity prices recovering. We just need to know if the financials are a false tell. Opinions abound; I watch the charts.

AIG: Wondering out loud

In the news again with bonus payouts. There is something almost laughable about the argument by any of these firms that required intercession from the government because they ran their businesses so badly claiming that the bonuses are a requirement to keep their so-called talent.

In AIG's case, they said that the bonuses were legally binding. A reasonable person has to wonder how the clause surrounding the measurement and payment of bonuses for performance is crafted which would allow performance that led to insolvency and financial chaos in world markets to be compensated with a bonus.

Lastly, one has to wonder that if these wunderkinds routinely negotiate employment contracts that allow for payment of bonuses under such circumstances (not to mention leading the company to experience 'such circumstances') how can the company be considered competent to extricate itself out of this mess?

Here's the English Setter girl, Belle, I transported yesterday:

Stuff

I'm just back from doing a brief run from RIC to Fredericksburg. I took some pups up and came back with Belle, a beautiful English Setter on her way to her forever home. She reminded me so much of my Lucy! We were early to the meet stop (as they were early arriving in F'burg) so I took her for a walk in the rain. It is cold and miserable, but she was happy as cold be. She's has a long trip, so this break was welcome for her. Dogs don't mind the rain!

I've stimulated the economy a bit this week. Today I bought some wine (Oak Grove 2007 Viognier). It has price point of $7.99. I bought a case. It has a 89 pt rating from Wine Spectator. That's terrific value and quality intersect.

After Total Wine I went to Stein Mart. I needed a bit of sprucing up. I need to revive my Fit By Fifty initiative and spruce up that way. Here is is mid March, and I've done nothing since New Year's. Bad, bad, bad.

Last week, I went to Tuesday Morning and bought some prohibitively expensive sheets. But that are beautiful and sumptuous. I also bought a two coverlets. One made out of bamboo fiber which is very pretty. It's been several months since I have bought a thing. I'll be back in guerrilla economic mode. But it was nice to beautify my bedroom a bit...as well as myself.

I did buy some BAC at $3.73. I'm just going to forget about. I'll be like the Prince on Citigroup many, many years ago. I still have lots of cash, and I'm not in any hurry to get in fully.

Pics from our Snow

I was reflecting a bit yesterday morning on the violence of the weather as cold and warm air collides that marks the transition of winter to spring. The violence of the market is so similar.

We had a beautiful snow on March 1. I did manage to stop long enough and take some pictures. There is a lovely muffled quietness in the snow enveloped woods. Here are a few pics. The dogs are Ella and Macy. I would have snapped a picture of Daisey, but she was busy running all day long in the snow. She had ice on her little tufts of fur and did not stay still long enough to appear in any frames:

Acapulco Cliff Divers

Well, it is one thing to see them in Acapulco, and it is quite another to see them in you portfolio. Here's my diver, who goes by the name of WH

I don't have a stop loss. Personally, on thinly traded stocks, you can get shaken out easily enough. I'm still long, but I'd be lying if I said that the 34% decline wasn't a wee bit painful.

The chart is also a useful example of how seeming support, once broken and aid a abet a rather sizable downfall. As support was rather easy to see, I'm confident that there were alot of stop losses sitting around it. Accordingly, once obvious support is broken it triggers a cascade of sell orders that result in the picture you see above.

A stop loss order does not help you in these instances. I have found that it's best to watch the chart and be willing to endure a hit if support is broken or sell and re-enter when the stock's action is more constructive.

Defensive?

Here's a chart (click to make larger) of consumer staples. You'll recognize this chart as media sausage stuffing for recommending that you buy something 'defensive'. At a high of about $30. it is now trading at $19 and change for a 34% loss. So much for being defensive. It's like wandering into the streets loaded with jewelry at the annual Thug Convention Parade and Pillage. Rather than being beat up and left for dead unconscious on the sidewalk, you were defensive and copped a few moves that allowed you to just to crawl away after taking a beating and losing your jewelry. The better choice would have been simply to stay inside in the warmth, comfort and security of your home.

Conventional Wisdom

I've written in this space about the danger of conventional wisdom with respect to the markets. Conventional wisdom works when things are conventional. Conventional wisdom is likely to get you killed if you are in unconventional times.

I like Martin Goldberg's blog. He has a post about Consumer Staples---the previously presumed to be 'safe harbor' for investors. His post is entitled: Throw away the cookbook.